| Matter of Ace Hardware Corp. v Little |
| 2009 NY Slip Op 04791 [63 AD3d 1345] |
| June 11, 2009 |
| Appellate Division, Third Department |
| In the Matter of Ace Hardware Corporation, Appellant, v MarjorieLittle, as Assessor of the Town of Wilton, et al., Respondents. (And Another RelatedProceeding.) |
—[*1] Daniel G. Vincelette, P.C., Albany (Daniel G. Vincelette of counsel), for Marjorie Little andanother, respondents. Judge & Duffy, Glens Falls (Monica A. Duffy of counsel), for South Glens Falls CentralSchool District, respondent.
Cardona, P.J. Appeal from an order and judgment of the Supreme Court (Ferradino, J.),entered February 6, 2008 in Saratoga County, which dismissed petitioner's applications, in twoproceedings pursuant to RPTL article 7, to reduce the 2003 and 2004 tax assessments on certainreal property leased by petitioner.
The underlying facts of this case are set forth in a prior decision of this Court (49 AD3d1008 [2008]). Briefly, petitioner challenges the 2003 and 2004 real property tax assessments ofproperty it leases in the Town of Wilton, Saratoga County, which is owned by the County ofSaratoga Industrial Developmental Agency (hereinafter SIDA), and is improved by anapproximately 798,640 square foot warehouse facility with a 22,930-square-foot two-storyoffice/cafeteria complex. As relevant herein, the lease agreement between petitioner and SIDAincludes petitioner's consent to make annual payments in lieu of taxes, the amounts of which[*2]would be based upon the assessed value of the property. In2000, a small portion of the parcel was sold and, as a result, the assessment for the property wasreduced by $3,000, i.e., from $31,848,800 to $31,845,800. Thereafter, petitioner filed agrievance requesting an assessment reduction, whereupon it was reduced to $29,637,300.
In July 2003, petitioner commenced the first of these proceedings pursuant to RPTL article 7challenging, among other things, the assessment of the parcel by respondent Board ofAssessment Review of the Town of Wilton as excessive. Respondent South Glens Falls CentralSchool District filed a notice of appearance and intervened in the proceeding. In July 2004, therewas a revaluation in the Town of Wilton and the Board raised the assessment to $35,100,000,which petitioner challenges in the second of these proceedings. Subsequently, in June 2006, theSchool District moved to dismiss the 2003 petition and Supreme Court denied that motion. ThisCourt dismissed the School District's subsequent appeal from that interlocutory order on thebasis that, in the interim, a final order and judgment had been issued (49 AD3d 1008 [2008],supra). Supreme Court dismissed both proceedings on the merits following a trial, promptingthis appeal by petitioner.
Notably, in tax certiorari proceedings, property valuations performed by a tax assessor arepresumed to be valid; however, the presumption may be rebutted if the petitioner presentssubstantial evidence to the contrary (see Matter of FMC Corp. [Peroxygen Chems. Div.] vUnmack, 92 NY2d 179, 187 [1998]). In the event the presumption is rebutted, the petitionermust then "demonstrate by a preponderance of the evidence that the subject property has beenovervalued" (Matter of Gordon v Townof Esopus, 59 AD3d 896, 897 [2009], appeal dismissed 12 NY3d 848 [2009];see Matter of FMC Corp. [Peroxygen Chems. Div.] v Unmack, 92 NY2d at 188). Uponappellate review, it is the Court's function to "review the trial court's finding to determinewhether it is supported by or against the weight of the evidence" (Matter of Rite Aid of N.Y.No. 4928 v Assessor of Town of Colonie, 58 AD3d 963, 964 [2009], lv denied 12NY3d 709 [2009] [internal quotation marks and citations omitted]).
Here, assuming arguendo, that petitioner made a sufficient initial showing to rebut thepresumption of validity, we find that Supreme Court did not err in concluding that petitionerfailed to demonstrate by a preponderance of the evidence that the assessments for the 2003 and2004 tax years were overvalued. In support of these proceedings, petitioner submitted appraisalreports from John Coyle, a real estate broker and certified real estate appraiser. At trial, Coyletestified that the value of the subject property as of January 1, 2003 was $23,600,000 and, as ofJanuary 1, 2004, was $23,800,000. In preparing his reports, Coyle testified that he utilized asales comparison approach, as well as a "reconstruction cost approach" method which Coyleadmitted was not included in the treatises traditionally relied upon by real estate appraisers.Following the submission of testimony regarding that methodology, Supreme Court found thatapproach to be inappropriate and struck that portion of his report and testimony.
With respect to the sales comparison analysis utilized by Coyle, he identified several sales heclaimed supported his valuation. However, the properties cited by Coyle were dissimilar to thesubject property in size and age and Supreme Court was unpersuaded by the adjustments thatCoyle attempted to make to account for those differences. Furthermore, since two of the salesselected by Coyle involved companies under financial distress, the court found that their saleprices were "not an accurate reflection of market value" (see Matter of Friar Tuck Inn of Catskills v Town of Catskill, 2 AD3d1089, 1090 [2003]; Matter of Villa Roma Country Club v Fulton, 301 AD2d 911,912 [2003]).[*3]
In contrast to petitioner's evidence, the Board's appraiser,Barry Herbold, testified that he arrived at his assessments by utilizing a sales comparisonapproach, a reproduction cost approach and an income capitalization approach, all of which havebeen recognized as accepted and appropriate methodologies (see Matter of Lia v Town ofNiskayuna, 300 AD2d 876, 877 [2002]). Herbold testified that all three approaches wereapplicable because he found comparable distribution warehouses in the Northeast with availablelease and sales data to make his comparisons to the subject property. With respect to theutilization of the sales comparison approach, Supreme Court specifically concluded thatHerbold's appraisal was "more reasonable and credible" than that of Coyle. Herbold's reportassessed five sales that he indicated were comparable to the subject property in location,construction, age, condition, layout, ceiling heights and equipment and ranged fromapproximately 500,000 square feet to 1,500,000 square feet. In examining Herbold's analysis, thecourt opined that he utilized appropriate adjustments for any variations. As for the othervaluation methods employed by Herbold, the court found them to be appropriate. Herbold statedthat he utilized a reproduction cost approach because he was given "actual known constructioncosts" due to the building being "practically new" and trended the costs upward to account forthe time between the date construction was completed and his valuation date. With respect to hisincome capitalization analysis, Herbold utilized five similar leases in rendering his conclusionsand adjusted for any differences in comparison to the subject property.
In concluding that petitioner had not met its burden by a preponderance of the evidence,Supreme Court determined that Herbold's reconciliation of the valuation approaches was morereasonable, credible and thorough than the conclusions of Coyle. Given the record proof and"deferring to Supreme Court's resolution of the credibility question created by the appraisers'conflicting opinions" (Matter of BrooksDrugs, Inc. v Board of Assessors of City of Schenectady, 51 AD3d 1094, 1096 [2008],lv denied 11 NY3d 710 [2008]; see Matter of Eckerd Corp. v Semon, 44 AD3d 1232, 1233[2007]), we find that the court's conclusions were not against the weight of the evidence (see Matter of Gibson v Gleason, 20AD3d 623, 626 [2005], lv denied 5 NY3d 713 [2005]).
Petitioner's remaining arguments stemming from Supreme Court's order and judgment havebeen examined and found to be unavailing. Lastly, in light of our conclusion that the petitionswere properly dismissed, it is unnecessary to consider the School District's alternative argumentsin support of affirmance.
Mercure, Kavanagh, Stein and McCarthy, JJ., concur. Ordered that the order and judgment isaffirmed, without costs.